Gov’t dared: Bare loans with ‘confidential’ terms

MANILA, Philippines — Disclose to the public all the loans from China that contain confidentiality clauses to prove that there’s nothing irregular about these clauses, a party-list representative challenged the Department of Finance (DOF) on Wednesday.

In a statement, Bayan Muna chairman Neri Colmenares called out an earlier pronouncement from a DOF official that dismissed as “erroneous” the group’s position that the China loans for two big-ticket water projects bear “onerous” provisions.

“DOF Undersecretary Mark Dennis Joven said that the Kaliwa and Chico dam loan deals have ”˜standard’ provisions but my challenge to him is to show us other loan agreements with confidentiality clauses,” Colmenares said.

Joven on Monday said that while the loan agreements for Kaliwa and Chico dam did contain confidential clauses, these are supposedly paired with “specific provisions” stating that the agreements may be released “in accordance with any Philippine law.”

“Anyone who closely reviews the loan agreements with China will find that the provisions are standard across our loan agreements with other lenders,” the DOF official said.

According to Joven, the Philippine government “continues to uphold strict standards in dealing with foreign lenders,” as it tries to fund flagship infrastructure projects under its “Build, Build, Build” program.

Other loan agreements, such as those with Japan, Korea and France, even those contracted by past administrations, contain similar provisions on the choice of governing law, Joven added.

Colmenares, however, expressed doubts about Joven’s claims that the China loan provisions was “standard across agreements with other lenders.”

“I challenge the DOF to name 10 loans with countries other than China but with the same confidentiality clauses as the Kaliwa loan, (and) I will apologize to USec. Joven,” the Bayan Muna chair said.

If it fails to present other loans with confidential clauses, then the DOF should retract its statement and admit that such loans with China are indeed lopsided in its favor, Colmenares said.

According to Joven, the government had six top considerations in deciding the type of financing to enter into in its “Build, Build, Build” projects.

These are: they must benefit the Filipino people; they are cheaper or concessional foreign financing; there must be public disclosure of information on the loans; the loan provisions must be standard across all lenders; the choice of arbitration venues and rules must be negotiated on a per loan-agreement basis, and the loan must still allow the government to manage its debt responsibly and sustainably.